Moody's: Progressive view negative

Moody's Investors Service said it affirmed the A1 senior debt rating of Progressive Corp. and changed the outlook to negative from stable following the company's recent announcement that it will incur a significant write-down of its large investment in Fannie Mae and Freddie Mac preferred stock given that the two entities were placed into conservatorship.

The agency said the negative outlook reflects the reduced financial flexibility and liquidity afforded to the holding company given the significant asset impairments at Progressive Investment Co., Inc., where most of the Fannie and Freddie preferreds are held. Also, the high level of exposure to Fannie and Freddie preferreds raises questions regarding risk management and the adequacy of existing investment portfolio guidelines, in Moody's view.

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